Shearwater lands £25m telco contract extension

The deal is expected to contribute £12.5m to FY26 revenue and lift full-year top line above market expectations

Shearwater Group has secured a five-year contract expansion worth around £25m with a UK-based global telecommunications provider.

The agreement was awarded to the group’s subsidiary, Brookcourt Solutions.

Under the deal, Brookcourt will continue delivering its packet monitoring, forensic analysis and service assurance technologies across the customer’s network infrastructure and strategic clients.

The contract is expected to generate around £25m in revenue over its five-year term, with approximately £12.5m set to be recognised in FY26 through the delivery of initial software and support licences.

Shearwater said the arrangement reinforces its expectations for FY26 adjusted EBITDA, while revenue is now expected to come in slightly ahead of market forecasts.

The company said the contract also provides enhanced long-term revenue visibility.

The first payment is expected to be received in early FY27.

The company said it understands current market expectations for FY26 to be revenue of £35.5m, adjusted EBITDA of £2.4m and net cash of £7m.

“We are delighted to have secured this significant five-year expansion agreement with one of the world’s leading telecommunications providers,” said Phil Higgins, CEO of Shearwater.

“This award reflects the strength of our technology solutions, the quality of our service delivery and the trusted partnership we have developed with the customer over many years.”

This marks Shearwater’s fourth contract win since the start of the year.

In April, it signed a £1.8m agreement with one UK telecommunications provider as well as a £1.3m deal with another.

In February, it secured a cyber defence contract worth around £9m with a global financial services organisation.

While current markets expectations point to FY26 revenue of £35.5m, this would still represent a decline from FY25, when top line stood at £39.5m.

The 29 per cent year-on-year increase in FY25 was fuelled by its services division, which increased 34 per cent to £37m on the back of public and private sector demand.

But the company’s software business, which accounted for around six per cent of turnover, dropped 14.9 per cent to £2.6m due to what the firm described as competitive pressures.